A joint stock company, as a legal entity has certain capital assets which is expressed in money. A joint stock company is an artificial person as it does not possess any physical attributes of a natural person and it is created by. Insurance company, a saudi joint stock company the company as at 31 march 2019, and the related interim statements of income and comprehensive income, changes in shareholders equity and cash flows for the threemonth period then ended, and a summary of significant accounting policies and other explanatory notes. Formation of joint stock company business studies class 11.
The important features of a joint stock company are the following an artificial person created by law, with a distinctive name, a common seal, a common capital with limited liability, and with a. It is not possible for each shareholder to participate in the management affairs of the business. A company is an artificial being, invisible, intangible and existing only in. Statute of a joint stock company pursuant to article 35 of the law no. Board of directors of joint stock companies is the body which manages and represents the company in the structure of joint stock company. The aim of our work is to determine joint stock companies operating and producing sports services in the late period of ottoman empire and the early period of turkish republic. Any person shareholder participates with one or more. The companies act specify that there must be a minimum number of two members to form a joint stock company. A company has a separate legal entity from its members. It is a kind of joint stock company created by the grant of a royal charter is called a chartered company. It also contains solved questions for the better grasp of the subject in an easy to download pdf file.
Larger capital the huge capital required by modern enterprises would not be possible under other forms of organisations like sole individual proprietorship and even in partnership. The members of a joint stock company must not be less than three. After the passing of companies ordinance 1984, no new company can be formed by a royal charter in pakistan. This makes it a legal entity that respects all laws and regulations. A joint stock company comes into existence only when it has been. In this regard, the bod is liable to determine the company organization, to appoint the authorized individuals that manages and represents the company. A joint stock company is considered as a trading company, regardless of the fact that operations conducted by it are not of a trading nature. Chubb arabia cooperative insurance company the company is a saudi joint stock company registered on 28 rajab, 1430h corresponding to july 21, 2009 under commercial registration number 2050066029 which was later amended to 2051043431 dated 9 shaaban 1431h corresponding to july 21. A joint stock company is an artificial person as it does not possess any physical.
The owners and business have a separate legal entity. This means that the law does not recognize the owners and the business as the same. A minimum of two 2 shareholders may form a joint stock company there is no maximum. The important features of a joint stock company are the following an artificial person created by law, with a distinctive name, a common seal, a common capital with limited liability, and with a perpetual succession. In the study, a qualitative method was followed by descriptive. May 08, 2018 this pdf file for class 11 formation of joint stock company subjects business studies topic contains brief and concise notes for easy understanding of topics and quick learning. A company is an incorporated association of persons formed usually for the pursuit of some commercial purpose.
Joint stock companies fall under two distinctive categories. The characteristics of jointstock companies are as follows. Just as in the case of a normal person, an artificial legal person can own properties, can sign. Pdf the development of joint stock companies according to. Pdf joint stock companies or corporations are the highest forms of business organization and are regulated by law. Joint stock company national institute of open schooling. The company is essentially like an artificial person. Justice lindley, a company is meant an association of many persons who contribute money or moneys worth to a common stock and employ it in some trade or business, and who share the profit and loss as the case may be arising there from.
Objectives after studying this lesson, you will be able to. After industrial revolution, there must be changed in the production system. A company is an artificial person recognized by law, with a distinctive name, a common seal, a common capital comprising transferable shares of fixed value, carrying limited liability, and having a perpetual succession. Dec 27, 2014 company act, 1994 a joint stock company is an association of many persons who contribute money or moneys worth to a common stock and employ it for a common purpose. A corporate entity may be a shareholder and two affiliated foreign companies may form a saudi company. A shareholder owns one or more shares and is not responsible for the obligations of the joint stock company and of the limited partnership joint stock company. Whereas a partnership or a sole proprietor, it has no. Since members of a joint stock company have limited liability it is possible to raise capital from the public without much difficulty. Definition of joint stock companydefinition of joint stock company justice marshall.
With the technological improvements, the scale of operations has increased. Some features of the jointstock company are given below. Joint stock companies jsc are different depending on the country where they are registered in. A company is a voluntary association of persons formed and. Classification of companies by mode of incorporation. Module ii forms of business organisation notes 4 cooperative societies and joint stock companies in. Features of joint stock company separate legal entity a joint stock company is an individual legal entity, apart from the persons involved. The requirements for finances and managerial resources have gone up.
Like a natural person, it can do certain things, like own property in its name, enter into a contract, borrow and lend money, sue or be sued, etc. It is created by a process of law and can be put to an end only by a process of law. It is this ease of ownership that props up the stock exchanges across the world. Joint stock company is a new venture in the big business area. The ideas and countermeasures of renovation of jointstock. Before knowing the various stages of promotion of a joint stock company let us discuss about the role and importance of promoters. Formation of joint stock company business studies class. Joint stock company in oman types of joint stock company. Joint stock company is one of the largest forms of the entity in oman.
Features of a joint stock company 1 artificial legal person a company is a legal entity that has been created by the statues of law. A company has a distinct and separate legal entity, independent of its members. The 1844 act created the registrar of joint stock companies, empowered to register companies by a twostage process. A joint stock company is a voluntary association of persons formed for the purpose of some business for profit with common capital, divisible into transferable shares and possessing a corporate legal entity and a common seal. It means that the company can own property, make contracts, and file suits in it own name.
Advantages and disadvantages joint stock company advantages and disadvantages advantages of joint stock company. Despite the bubble act, many business associations were. There is no alternative way to form a company without. Characteristics and features of a joint stock company separate legal existence. The modern corporation has its origins in the joint stock company.
Define joint stock company and explain its features. The eighteenth century presented some new features in the development of company law in england. Registration of joint stock company is compulsory by law. The common stock contributed is denoted in money and is the capital of the company. It is also called saog and it offers its shares to the public and is listed on the muscat securities market. Section 31 of indian companies act, 1956 company means a company formed and registered under this act or an existing company existing company means a company formed and registered. Hence, all the shareholders use their voting rights and elect a body for the management of routine affairs of the business. Artificial person, separate legal entity, formation, perpetual succession, control, liability, common seal and risk bearing i artificial person.
A joint stock company is created by law, which means it received the attribute of an artificial legal person. The bank of england, the east india company, chartered bank etc. It can own assets and can because it is an entity it can sue or can be sued. A joint stock company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company. Joint stock company definition, features top 3 types with. Disclosure guidelines for public and private joint stock.
In this type of registered company the liability of its members is limited up to the value of the shares purchased by them. The company enjoys all the rights as a citizen of a country would enjoy. Features of a joint stock company 1 artificial legal person browse more topics under forms of business organisations 2 separate legal entity 3. Voluntary association the above important features are explained briefly as under. Nov 11, 2011 definition a joint stock company is a voluntary association of individuals for profit, having its capital divided into transferable shares, the ownership of which is the condition of membership. You must remember these points if you are asked to explain the features of a jointstock company.
The joint stock company in nineteenth century england and france. Joint stock companies a joint stock company form of organisation was evolved with a view to overcome some of the disadvantages of the partnership such as lack of continuity, unlimited liability etc. Advantages and disadvantages of joint stock company. A joint stock company is a business owned by its investors, with each investor owning a share based on the amount of stock purchased. Joint stock company features, merits, demerits business. Like natural persons, a company can own property, incur debts, borrow money, enter into contracts, sue and be sued but unlike them it cannot breathe, eat, run, talk and so on.
Owners of the joint stock company are known as shareholders. Characteristics of joint stock company grade 11 management. Doing business in saudi arabia 2017 baker mckenzie. Each shareholder owns company stock in proportion, evidenced by their shares. Features of a joint stock company economics discussion. Features, merits and demerits of a joint stock company. This is a considerable difference considering that for public limited companies the minimum number of members is 7, while the maximum number is not specified. Some of the more salient features of a joint stock company are. Since the shares are transferable shareholders can quickly sell them at a profit. Separate legal entity limited liability common seal. Given below are some statements about characteristics of joint stock company.
A jointstock company is a business entity in which shares of the companys stock can be bought and sold by shareholders. It is a way to incorporate a given business with two or more shareholders. Shareholders are not the joint owners of the companys property. Liability is limited it encourages more people to jump aboard a joint stock entity.
Unlike the forms of businesses above, a joint stock company is time consuming and expensive to form. A joint stock company is a legal association between individuals that creates a new entity for business purposes. Following is the features of joint stock company 1. The outstanding advantage is that it allows vast mobilization of capital which. It is essential for such companies to use the word limited at the end of their names so that the people know that the.
In modernday corporate law, the existence of a jointstock company is often synonymous with incorporation and limited liability. Any person shareholder participates with one or more shares, so with the payment for these shares the basic. Module ii forms of business organisation notes 4 cooperative societies and joint stock companies in the previous chapter, we. It can own assets and can because it is an entity it can. The capital assets are divided into equal parts shares. Any shareholder of a company can enter into a contract with the company. Separate legal entity a joint stock company is an individual legal entity, apart from the persons involved. In this regard, the bod is liable to determine the company organization, to appoint the authorized individuals that manages and represents the company and to supervise them.
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